Starting a Tourism or Hospitality Business in Cyprus
Cyprus, with its year-round sunshine, rich history, and unique culture, is a premier destination for tourism and hospitality. The island attracts millions of visitors annually, creating a constant demand for high-quality services and experiences. For entrepreneurs, this presents a compelling opportunity to launch a new venture in one of the country's most vibrant and profitable sectors. This guide will provide a detailed look at starting a tourism or hospitality business in Cyprus, covering the market opportunities, the legal and administrative steps, and the key licensing requirements for a successful launch in 2025. For a broader overview of the local business environment, you can read our guide on The AI-Powered Marketer: Business Adviser. You can also explore our guide on company registration in Cyprus.
1. Market Opportunities: A Diverse and Growing Sector
The Cyprus tourism and hospitality market is highly diverse, with a wide range of opportunities for businesses of all sizes. The sector is a key pillar of the local economy, and its continued growth and stability make it a hub of opportunity for both local and international businesses. You can also explore our business directory of all businesses.
Accommodation and Lodging
The accommodation sector is a key part of the tourism industry, with a constant demand for hotels, tourist villas, and other forms of lodging. The market is particularly strong in the coastal resorts of Ayia Napa, Limassol, and Paphos. For a business, this presents a great opportunity to invest in a new hotel or a tourist villa. Our guide on the accommodation and lodging market provides more detail. For more information on finding a good location, you can explore our guide on the best Cyprus villages.
Food and Beverage
The food and beverage sector is another key part of the tourism industry. From traditional taverns to fine dining restaurants, there is a constant demand for high-quality food and drink. For a business, this presents a great opportunity to open a new restaurant or a cafe. The local cuisine is a major draw for tourists, and a business that offers an authentic Cypriot culinary experience is likely to be very successful. You can explore our directory of all local food and beverage suppliers.
Travel Agencies and Tour Operators
The travel and tourism sector is a key pillar of the local economy. For a business, this presents a great opportunity to open a travel agency or a tour operator. The demand for tours and activities is high, and a business that offers unique and memorable experiences is likely to be very successful. You can explore our guides on the ancient ruins or the Akamas Peninsula to get a good idea of the local attractions.
2. Legal and Administrative Steps for Your Business
Starting a tourism or hospitality business in Cyprus involves two key legal steps: company registration and business licensing. It is essential to work with a professional team that includes a lawyer, an accountant, and a corporate services provider. They will assist you with the entire process, from choosing the right legal structure to a fully compliant and operational company. You can also explore our guide on company formation for foreigners.
Company Registration
The first step is to register your business as a legal entity with the Cyprus Registrar of Companies. The most common choice is a Limited Liability Company (LLC), which is a separate legal entity with limited liability for its shareholders. The registration process is straightforward and is best handled by a professional. You can find a professional to help with this in our directory of Professional Corporate Services.
Business Licensing
Once your company is registered, you must secure the specific licenses and permits required to operate in the tourism and hospitality sector. These licenses are granted by the Cyprus Deputy Ministry of Tourism or the local municipality, depending on the type of business. For example, a restaurant will need a license from the local municipality, and a hotel will need a license from the Deputy Ministry of Tourism. This is a very important part of the legal requirements and should not be overlooked. For more information, you can find a suitable advertising agency in our directory. You can also explore our directory of all finance, banking, and investment.
3. Financial and Tax Considerations
Cyprus offers a highly favorable tax and financial environment for businesses. It is essential to have a clear understanding of these considerations to ensure a profitable and legally compliant operation. You can also explore our guide on the payroll taxes. For more on the costs involved, you can read our guide on the costs to set up a limited company.
Corporate Tax Rate
The corporate tax rate in Cyprus is a flat **12.5%**, which is one of the lowest in the European Union. This low rate is a huge benefit for companies, as it allows them to retain more of their profits and reinvest them in their business. The country also has a number of tax exemptions and incentives for businesses. You can also explore our guide on the Cyprus Non-Dom Status. You can also get more help on Cyprus corporate tax in our guide.
VAT Registration
Businesses that provide goods or services in Cyprus are generally required to register for VAT if their turnover exceeds €15,600 in any 12-month period. The standard VAT rate in Cyprus is 19%. For a tourism business, it is essential to be aware of the VAT rules and to ensure that your business is compliant. You can also find a suitable accounting or auditing firm in our business directory.
